Judo Bank reported a robust 24% increase in statutory net profit after tax for FY25, driven by strong loan book growth and operational efficiencies. The bank projects even stronger profit growth in FY26, underpinned by strategic expansion and technology upgrades.
- Statutory NPAT up 24% to $86.4 million
- Gross loans and advances grew 16% to $12.5 billion
- Net interest margin improved to 2.93%, with 2H25 at 3.04%
- Deposits near $10 billion, boosted by direct retail growth
- FY26 profit before tax guidance of $180–190 million with ROE target in low to mid-teens
Strong Financial Momentum
Judo Bank has delivered a compelling financial performance for the full year ended June 30, 2025, with statutory net profit after tax (NPAT) rising 24% to $86.4 million. This growth was supported by a 14% increase in underlying profit before tax (PBT) to $125.6 million, reflecting the bank’s successful scaling of its loan book and improved net interest margins.
The bank’s gross loans and advances (GLA) expanded 16% to $12.5 billion, nearly double the system growth rate, highlighting Judo’s differentiated approach to serving small and medium enterprises (SMEs) and its strategic expansion into regional markets. Deposits also grew strongly, reaching nearly $10 billion, driven by a $1.4 billion increase in direct retail balances.
Operational and Strategic Advances
Beyond financial metrics, Judo marked significant operational milestones, including the completion of a technology replatforming to enterprise-grade systems. This upgrade positions the bank to operate at scale and deliver enhanced customer experiences. The team expanded to 557 employees, including 161 relationship bankers, supporting over 4,600 customers across 31 locations nationwide.
Judo’s CEO, Chris Bayliss, emphasized the bank’s deliberate three-phase growth strategy, build, scale, and now optimize. With foundational technology and data infrastructure in place, the focus shifts to enhancing the SME lending franchise, broadening product offerings, and optimizing funding and capital efficiency.
Outlook and Guidance for FY26
Looking ahead, Judo projects continued strong lending growth with GLA expected between $14.2 billion and $14.7 billion. The net interest margin is forecast to range from 3.00% to 3.10%, supported by new deposit products aimed at reducing funding costs and increasing flexibility. The bank targets a cost-to-income ratio below 50%, signaling improved operational efficiency.
Profit before tax guidance for FY26 is set between $180 million and $190 million, with a return on equity (ROE) target in the low to mid-teens. This reflects confidence in the bank’s ability to leverage scale and technology investments to drive profitability, even amid ongoing economic uncertainties.
Navigating Economic Uncertainty
Judo acknowledges the mixed economic environment, with early signs of recovery in Australia but persistent pressures on some sectors. The bank’s arrears ratio remained stable, indicating resilience in credit quality despite these challenges. Capital adequacy remains strong, with a Common Equity Tier 1 ratio of 13.1%, supporting further growth.
Overall, Judo Bank’s FY25 results and FY26 guidance underscore a confident trajectory as it consolidates its position as a leading SME-focused challenger bank in Australia.
Bottom Line?
Judo’s FY25 momentum sets the stage for accelerated profit growth, but execution on funding innovation and credit quality will be key to sustaining this trajectory.
Questions in the middle?
- How will Judo’s new deposit products impact funding costs and margins in FY26?
- What risks might arise from the modest increase in impaired assets amid economic uncertainty?
- Can Judo sustain its rapid loan book growth while maintaining credit quality and operational efficiency?